Net income

- [Voiceover] Net income is the last line…of the income statement, and as such,…it earned the name of the bottom line.…It is indeed the bottom line of your company…and where you can see if you're making any money,…some money, or good money.…It is one of the most important aspects of your business…and definitely the most important one…of the income statement.…It is the element of the income statement…that needs to perform well, and which you need to focus on…by analyzing its underlying elements,…such as revenue, expenditures,…whether operational or non-operational…to get it to the expected level.…

Net income is how much money the company is making…over a certain period of time…and it is very different from cash.…Net income is money earned, but not yet paid,…and true money made is money in the bank.…To go back to the expression, "revenue is vanity,…"margin is sanity, and cash is reality."…Only cash is reality.…We will deep dive into that topic in the next chapter.…

Resume Transcript Auto-Scroll

Author

Released

11/7/2013

A wealth of information is available to you if you know how to read financial documents. Being able to glean information from an income statement, a cash flow statement, or a balance sheet can give you an edge in understanding not only your own business but also your competition. In this course, Rudolph Rosenberg, a finance expert, takes you through the steps of making sense of what is contained in financial reports and how to read them. You'll also learn how they fit together to give you a view of a company's situation.

Lynda.com is a PMI Registered Education Provider. This course qualifies for professional development units (PDUs). To view the activity and PDU details for this course, click here.The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.

Topics include:

What is a financial statement?

Reading the balance sheet

Understanding depreciation, liabilities, and equity

Reading the income statement

Understanding revenue, costs, profitability, and net income

How cash flow works

Analyzing financial documents with context<br><br>

The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.